It is quite simple, there is a magic and infallible formula:
Visits x Conversion x ADR = Success
In reality is not as easy as a simple formula on a paper, although if we analyze the 3 key factors separately, we can work on each of them. Trying to accomplish the highest quality traffic to our website, convert to sales those visits and try to sell at the best possible price at all times. For each area there are different techniques that can lead us to success.
There are many areas to work that affect each of these 3 factors, but we are going to discuss some of the most important ones:
DISTRIBUTION STRATEGY OF THE DIRECT CHANNEL
I would say this one is the key to everything. Depending on how you focus your strategy, you will have different results. But focusing it on a model that develops the direct channel, even if it is little by little, has many advantages:
- Lower acquisition costs: 16-30% OTAs and other channels to those of direct sales that are far away from these, including marketing costs.
- Greater profitability.
- More control over the product, price and customer information.
- The ADR of direct sales is usually higher than in the OTAs, since it is a more favorable channel when selling a premium room, making an upgrade, package or extra.
- Direct sales have lower cancellation ratios. OTAs are usually around 40% and direct 10-15%.
- Easier to retain a direct customer than an OTA.
The price is still one of the variables that have more impact on the conversion of your direct channel. Your customers should be able to always book the best rate/offer on the official website.
I’m not going to begin with the speech about disparities, but you should make sure there are no OTAs with cheaper rates and if there are any, try to act in some sense. It is estimated that on average the direct sale of independent hotels is around 20%. Of them, hotels that have higher prices on their pages sell 2% in their direct channel, those with similar prices 15% and those with cheaper prices 27%. There are several ways to compete face to face with the OTAs, and for that you must have a clear marketing strategy and a booking engine prepared to suit all the needs.
What to say… It is essential to have an official website with a striking design and focused on the sale. Many of the visits a hotel receives are second visits that come from an OTA, by returning and search in Google by the name of the hotel. On that second visit is where you play all your cards and in the first 3 seconds is when the user will decide whether to stay or leave.
Navigation has to be easy and intuitive, fast and in a few steps. And the content unique and customized, with an excellent SEO OnPage job. Work the languages you need, the more the better and seek to implement all possible payment formulas.
Key. Mobile searches have already surpassed the desktop ones. The mobile solution is vital and must have a simple, intuitive and fully adapted design, basically like an App.
It must be fast, fast and fast. The speed of the mobile web is one of the aspects that affects most the conversion rate. 40% of users will leave if the web takes more than 3 seconds to load.
As mentioned before, it must be very intuitive, easy and with few steps. Focused totally on conversion. Very fast in performance and easy to manage through your extranet. It must be able among other things to connect promotions in different web pages and traffic channels. Accept all possible payment options and have integration with the main Channel Manager, PMS or Meta search engines.
TRAFFIC AND DIGITAL MARKETING
Are you investing enough? No matter if you have an amazing engine, if we don’t put gasoline, we won’t go anywhere.
We must do a planning. Every website or property can and should do it without excuses, from the big chains to the smaller hotels, each one considering its objectives and resources.
We must analyze, set objectives, plan actions, implement them, follow up and make corrections. The beauty of digital marketing is that it is very flexible when it comes to testing, measuring and drawing conclusions. If you don’t know exactly how much you should invest, you can use the 4% rule. Invest 4% of the amount billed by your direct channel. This can serve as an orientation.
It is very important to mention that practically 80% of users start their search for a trip through a search engine. In this sense, the online traffic map has changed a lot in recent years and we should adapt ourselves to it. The organic traffic has dropped and the payment has taken more weight. In 2015, the payment traffic represented an average of 38% and the organic traffic 62%. In 2017 it has changed and the payment traffic is already 58% of the total.
SEO by Hotel Brand has been relegated to lower positions and it has been more necessary than ever to invest in paid traffic:
But WATCH OUT, SEO is not dead! Not at all, it’s just as important as before. When he dies we will find out because many businesses will have to shut down. It still represents 30%, 40% or 50% of the general traffic, so be very careful. You have to take care of the content, by being fresh, updated and with good quality. We have to continue respecting the rules: sitemaps, robots, Google Search Console, headers, microformats, etc. Implement browsing in HTTPS secure environment on all pages, clean and functional design to reduce bounce rate, speed, speed and speed, think of mobile indexing and perform an intelligent link building.
ONLINE REPUTATION AND LOYALTY
As last points to highlight we can talk about online reputation. 93% of people consider quite important the comments of others when choosing a hotel. On average, only 36% of the hotels respond to the opinions of the clients. Why? If they are important, why not respond?
79% of user ratings are 4 and 5 stars (good or very good) and almost 40% of users would be willing to pay more for hotels with positive opinions. So, what are you waiting for? Answer them! Hire an online reputation system or a booking engine with its own, respond quickly, both positive and negative comments, email post stay and educate the staff at your hotel to be attentive during the stay because it will always generate good opinions.
Look for loyalty. A loyal customer is much cheaper and more profitable than one captured. The cost of capturing it can be around 20% from OTAs or between 4-15% from direct adding marketing costs and engine provider. If we retain it, it could go down to 7-10%, including a special discount plus the engine supplier. Each retained customer can save between 9-12% with respect to an OTA’s booking. There are several ways to work this: newsletter subscription, check in and check out, segment CRM, social networks, pre and post email stay, social login, sale recover, meta search engines, etc…
If you need help, please let me know.